Expect Yahoo Ads on Tumblr Feeds, Memes on Yahoo.com

With its $1.1 billion acquisition, Yahoo has pledged to keep Tumblr alive, though Tumblr users might eventually see Yahoo ads in their blog feeds, and Yahoo users could see Tumblr posts on the Yahoo homepage newsfeed.

With its $1.1 billion Tumblr acquisition, Yahoo has pledged to keep the blogging site alive, though Tumblr users might eventually see Yahoo ads in their blog feeds, and Yahoo users could see Tumblr posts on the Yahoo homepage newsfeed.

There might also be an opportunity for search to play a bigger role across Tumblr, according to Yahoo.

"The two companies fit beautifully together," Yahoo CEO Marissa Mayer said during a Monday morning conference call with analysts.

Mayer provided a laundry list of ways in which the Yahoo and Tumblr communities are complementary. Yahoo has older users, Tumblr attracts the young and GIF-obsessed (click the image above). Yahoo is strong on sports and finance, while Tumblr excels at art, fashion, architecture, and travel. Tumblr needs help when it comes to search and personalization, and Yahoo needs "great tools for creation and publishing," Mayer said.

A few meme-worthy links, however, are not worth $1.1 billion on their own. There must also be an advertising component. At this point, Tumblr only does "minimal" advertising; it only just rolled out mobile ads last month. Ultimately, Yahoo wants to "introduce a very light ad load" into the Tumblr stream, Mayer said. There will also be opportunities for Tumblr bloggers to place ads on their blogs, with permission.

There is also a "very compelling search story inside Tumblr," Mayer said. "We think there's an opportunity to growth our search business through integration with Tumblr."

The elephant in the room - for the tech press, anyway - is the adult and copyright-protected content that is among the 900 posts per second added to Tumblr. Will Yahoo crack down on these types of posts? One analyst on today's call danced around the topic, asking Mayer about content that wasn't "brand safe." She replied that the "richness and breadth of the content [on Tumblr], even though it's not as brand safe ... allows us to reach even more users."

Mayer assured those on the call that Yahoo has done its "due diligence" prior to doling out more than $1 billion. There are a "lot of marketers who are very eager to participate on the Tumblr platform," she said. "They can see the benefit of the demographics, they can also see just the huge volume of users and traffic there."

The last Yahoo acquisition of this size, Mayer said, was the company's 2003 purchase of Overture for $1.6 billion, which is now part of Yahoo's search business.

But don't expect billion-dollar Yahoo deals every month. Mayer said the Tumblr purchase is "an exception" to the company's M&A strategy. "You only do a transaction of this size and scale if you find an exceptional company and you find an exceptional fit."

"You don't set out to do an acquisition like this; you do this when it makes sense" and it's a good fit, she said.

As for Tumblr as a company, "we don't expect changes," Mayer said. "David [Karp] will continue to lead the business with his very insightful and inspirational thinking."

In a blog post, Karp said he was "elated" about the Yahoo purchase. "So what's new? Simply, Tumblr gets better faster. The work ahead of us remains the same  and we still have a long way to go!  but with more resources to draw from," he wrote, concluding "F**k yeah!"

Tumblr will remain in its New York offices. According to Mayer, the Tumblr management team signed on with Yahoo on Friday night, prior to the Yahoo board giving its final approval. "They just wanted to express their enthusiasm," Mayer said.

As for whether there might be some sort of integration with Flickr, Mayer said "we haven't looked at specific integration, but [it's] probably something we'll turn our attention to in the future."

Yahoo is holding a Monday evening press event in New York City, which is rumored to include some news about Flickr. Stay tuned to PCMag for all the details.

Yahoo has already made one small change. The company's official blog is now housed at yahoo.tumblr.com.

Chloe Albanesius has been with PCMag.com since April 2007, most recently as Executive Editor for News and Features. Prior to that, she worked for a year covering financial IT on Wall Street for Incisive Media. From 2002 to 2005, Chloe covered technology policy for The National Journal's Technology Daily in Washington, DC. She has held internships at NBC's Meet the Press, washingtonpost.com, the Tate Gallery press office in London, Roll Call, and Congressional Quarterly. She graduated with a bachelor's degree in journalism from American University...
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